What is Mirae Asset FANG Plus ETF?
- Asked By
- Updated On:06-Jun-2021
- Replies:3
Short Answer
The Mirae Asset NYSE FANG Plus ETF Fund is a good option for Investors who want foreign exposure. The Equity allocation is very concentrated to just 10 stocks which makes this ETF very volatile and risky. This ETF consists of the top 10 stocks in their respective sectors mostly TECH, like Amazon, Netflix. Facebook, etc. Hence Investors with high-risk tolerance and a long time period should consider this fund.
Detailed Answer
What is Mirae Asset?
Mirae Asset is an Asset management company headquartered in Seoul, South Korea. It offers various comprehensive financial services like asset management, wealth management, and other Mutual funds for investing. The Mirae Asset NYSE Fang is a new offering from the fund house that lets investors get exposure to the most valuable top 10 companies of the FANG category.
What is NYSE FANG?
"NYSE" stands for New York Stock Exchange and the term “FANG” is used to denote the top 4 Tech companies on the NYSE. These 4 companies are “Facebook”, “Amazon”, “Netflix” and “Google." These companies play a key role in most of the lives of people in some way or the other. The FANG index has gained popularity due to its extraordinary performance for a previous couple of quarters.
In the U.S, many stocks are listed on the NASDAQ, or the S&P Index buy only the best of the best companies are included in the FANG index. Therefore, one can say that the FANG stocks are somewhat in the “Elite Club” where the barrier for entry is very high. Due to these similar reasons, the valuation of these stocks is also high. This makes them an expensive option for “Value Investors” at the present valuation.
What is the Mirae Asset FANG Plus ETF?
With the rising popularity of the FANG stocks, Mirae Asset came up with a new NFO (New Fund Offering) under which all the FANG stocks and some additional market leaders were present.
This fund consists of all the sector leaders and is made up of 10 stocks. The weightage given to each of the stocks in this ETF is similar (10%). The constituents of this fund are-
1.Facebook
2.Amazon
3.Apple
4.Netflix
5.Google
6.Tesla’s
7.Twitter
8.NVIDIA
9.Alibaba’s
10.Baidu
All the 10 stocks are the market leaders in this segment and have equal weightage in this fund. The collective market cap of the following 10 companies is 7.7 Trillion dollars which are more than the total market cap of Nifty and Sensex put together.
This scheme offering by Mirae Asset will be an Open-End Fund which means there will be no cap on the maximum amount, this fund will accept. The NFO opens on 19th April and closes on the 3rd of May. The units will be allotted on the 10th of May. The minimum amount for investing in this NFO is Rs 5000 after which one can invest in the multiple of Rs 1/. An exit load of 0.50% will be charged if an investor sells them within 3 months.
This ETF will be listed on the NSE as well as BSE. After listing, one will be able to buy any quantity desired from the stock exchanges.
Who should invest in this ETF?
- Investors will a high-Risk Appetite should invest in this ETF. The risk is concentrated on a few stocks, therefore, the volatility can be high.
- Investors investing for a minimum time period of 3-5 years should look at this fund as the valuations of the FANG companies are rich and will require time to give good returns.
- Investors wanting to take exposure in abroad markets can invest in this fund as all the companies in this ETF are not listed in India. This will give exposure in abroad markets.
Conclusion
This fund is a good option for Investors who want foreign exposure in market-leading companies. The Equity allocation is very concentrated to just 10 stocks which makes this ETF very volatile and risky. Hence Investors with high-risk tolerance and a long time period should consider this fund.
Ask Your Query for FREE, Get quick answers from our FINTRAKK community!
Discussion (2)
Those who want a basket of all top-performing stocks in the US stock market can pick up this ETF. Yes, there is higher volatility, but then the returns are also equally higher. In the long run, you can have significant returns based on the performance of the stocks.
Yes , NRI can invest in Mutual Funds in Zerodha by opening a non-PIS account. However, there are restrictions for NRI investors with PIS accounts, as well as investors based in the US and Canada; they are not permitted to invest in mutual funds in Zerodha.
ETFs are a financial instrument made to track an underlying asset and provide similar returns based on the performance of the underlying. ETFs are listed on stock exchanges which make it easier to buy and sell at desired prices. ETFs are not only limited to stocks but cover a wide range of investment avenues like Commodities, Bonds, etc.
ETFs (Exchange Traded Funds) and Mutual Funds are similar investment vehicles that provide the investors various features. Both have their benefits and shortcomings. ETFs are a good option for passive investors who want to invest in a particular Index or Sector without much rebalancing. On the other hand, Mutual Funds are a better option for active investors who are more active with their investments. One can switch between funds according to their current strategies.
The Electric Mobility Smallcase is a basket of stocks that are selected by Smallcase based on the goal of the Government to achieve the sale of 60-70 Lakh hybrid & electric vehicles from the year 2020. The pros & cons are evaluated of the sector and the features of this smallcase are discussed below.
Yes, foreign nationals are allowed to invest in the Indian stock market. Individuals can invest under the category of Qualified Foreign Investors, and Institutional investors can do so under the category of Foreign Institutional Investor (FII).
Exchange-Traded Funds or ETFs are an investment tool that tracks particular securities like Equity, Commodity, Bonds, etc. ETFs are available for many categories from which one can choose from. These are listed on Stock Exchanges (NSE & BSE) hence there is ample liquidity and one can easily buy and sell these at their desired price during market hours. Some ETFs available for investment in Indian markets are Equity ETFs, Debt ETFs, etc.
Every Equity Investor should maintain some part of their portfolio diversified into foreign companies. This can be achieved through Foreign brokers or Mutual Funds and ETFs that invest in abroad markets. Investing abroad has many benefits such as exposure to the top global companies like Facebook, Amazon, Ford, etc. The tax implications on investments made outside India are different as foreign Equity is taxed as Debt Mutual Funds
Similar to traditional Mutual Funds, Fund of Funds are professionally managed funds that are available in multiple types. Some of the types of FoFs are Gold FoFs, ETF FoFs, International FoFs, Multi-Manager FoFs, and Asset allocation FoFs.
Gold BeES is a type of BeES (Benchmark Exchange Traded Securities). It is a type of ETF (Exchange Traded Fund) that's listed on the stock exchanges. This category of funds has a benchmark, in this scenario "Gold" which it tracks and follows. Gold BeEs has its underlying as Gold and the performance of the fund purely relies on the movement of Gold. Find out the advantages and features of Gold BeES.
HDFC Sky is a new trading platform launched by HDFC. It has ample features for the investors and participants can engage in seamless trading with it.
Rishika Agarwal
It consists of the top performing stocks and also has higher risks. There is instability in the market but it can also help in earning higher returns. The investors who are willing to take risks and are interested to invest their stock for a longer period of time, then it is a very good option.